Valeant Pharmaceuticals is a Canadian based company that develops, markets and manufactures a broad range of pharmaceuticals. The acquired company, Salix, is the leader in the growing U.S Gastrointestinal market, which is a wholly owned subsidiary of Valeant. They have over 22 products including known prescription brands like Xifaxan that will provide Valeant a diversified product breadth1.
Valeant Pharmaceuticals acquired Salix Pharmaceuticals on April 1, 2015 by purchasing all outstanding shares in cash of $173 per share2. The transaction was done in a single step on this date, purchasing 100% of outstanding shares and cancelling shares owned by the company or Salix for no consideration. At that date, Salix had 64.3 million shares outstanding with a total fair value consideration of $13.132 billion2. The original offer to acquire Salix was $158 per share in cash but was later negotiated to $1731. In exhibit 1, the cost of acquisition and allocation to identifiable assets is shown. Each untendered share had the right to convert to $173 cash consideration. This included both 100,000 shares of the outstanding stock option as well as the restricted stock of Salix. Valeant used funding from proceeds from senior unsecured notes, on …show more content…
Net cash provided by operating activities had decreased $94 million partly due to Salix’s payment of $168 million for outstanding restricted stock. Net investing activities had increased $15.48 billion largely from purchases of businesses and intangible assets including Salix and Amoun3. Lastly, financing activates increased $16.13 billion in 2015, relating to an increased of net proceeds of $10 billion from issuance of senior notes and net proceeds of $1.43 billion from the issuance of common stock to fund Salix. However, cash paid for the recovery of convertible notes in relation to the acquisition had decreased financing activities by $3.12
Valeant Pharmaceuticals acquired Salix Pharmaceuticals on April 1, 2015 by purchasing all outstanding shares in cash of $173 per share2. The transaction was done in a single step on this date, purchasing 100% of outstanding shares and cancelling shares owned by the company or Salix for no consideration. At that date, Salix had 64.3 million shares outstanding with a total fair value consideration of $13.132 billion2. The original offer to acquire Salix was $158 per share in cash but was later negotiated to $1731. In exhibit 1, the cost of acquisition and allocation to identifiable assets is shown. Each untendered share had the right to convert to $173 cash consideration. This included both 100,000 shares of the outstanding stock option as well as the restricted stock of Salix. Valeant used funding from proceeds from senior unsecured notes, on …show more content…
Net cash provided by operating activities had decreased $94 million partly due to Salix’s payment of $168 million for outstanding restricted stock. Net investing activities had increased $15.48 billion largely from purchases of businesses and intangible assets including Salix and Amoun3. Lastly, financing activates increased $16.13 billion in 2015, relating to an increased of net proceeds of $10 billion from issuance of senior notes and net proceeds of $1.43 billion from the issuance of common stock to fund Salix. However, cash paid for the recovery of convertible notes in relation to the acquisition had decreased financing activities by $3.12